WestRock Earnings: Cost Management Initiatives Are Ahead of Schedule but Demand Remains Tepid

No-moat-rated WestRock reported mixed fiscal second-quarter results. Net sales fell over 10% year over year as all segments reported declines. This was largely expected given the capacity WestRock has taken offline over the last year and lower published index prices experienced in the quarter. More importantly, management noted the firm has made significant progress on its cost-savings initiatives. Management had previously targeted $300 million to $400 million of cost savings for fiscal 2024, but the company has already achieved roughly $370 million in cost savings through the fiscal second quarter. We are very encouraged by this progress, and we think the company can drive improved results through the year as end market demand recovers. We maintain our $55 fair value estimate.